A common guideline is that your total monthly debt payments, including your mortgage, should not exceed 43% of your gross monthly income. That percentage is your debt-to-income ratio, and it is the primary lever most lenders use to determine your maximum loan amount. At a 90,000 dollar annual income, that works out to a maximum monthly debt load of roughly 3,225 dollars. At 65,000 dollars, it is roughly 2,329 dollars.
What the Numbers Look Like at Two Income Levels
The table below shows estimated maximum loan amounts at two income levels. These are illustrative only and assume a 6.5% rate, 30-year term, 500 dollars per month in existing debt, and a 20% down payment. Your actual number depends on your credit score, existing debts, down payment, and local property taxes and insurance.
| 65,000 Annual Income | 90,000 Annual Income | |
|---|---|---|
| Gross monthly income | 5,417 | 7,500 |
| Max total debt (43% DTI) | 2,329 | 3,225 |
| Minus existing debt | 500 | 500 |
| Max mortgage payment | 1,829 | 2,725 |
| Approximate max loan | ~290,000 | ~430,000 |
| Purchase price (20% down) | ~362,000 | ~537,000 |
Illustrative estimates only. Assumes 6.5% rate, 30-year term, 500 dollars existing monthly debt, 20% down payment. Not a commitment to lend.
The DTI Ceiling Is Not the Same for Every Program
The 43% guideline is not a universal limit. VA loans can go to 65% DTI in many cases. FHA allows up to 50%. If your DTI puts you outside the conventional range, a government-backed program may still qualify you. A loan officer can model your options against your actual numbers rather than the guideline ranges.
The Most Useful Thing You Can Do Right Now
Get a real pre-approval, not an online estimate. The number an online calculator gives you is a starting point. The number your lender gives you after reviewing your actual income, credit, and debts is the number you can take to a seller. Calculators use assumptions. Pre-approvals use your actual file.
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